[Independant] Simon Calder: End of the runway for BMI, but will passengers suffer?
What will it all mean for passengers – and staff?
BMI could be about to vanish. British Midland, as was, has done wonders for UK travellers. But by Friday the Heathrow-based part of its operation is set to become part of IAG and will be subsumed into BA. What will it all mean for passengers – and staff?
Remind me of the tangled history of BMI?
It wasn’t easyJet that opened up the skies of Europe – it was British Midland. Under Michael Bishop (now Lord Glendonbrook), the airline demanded the right to compete against the established “flag carriers” in the 1980s – first of all taking on British Airways from Heathrow to Belfast, Edinburgh and Glasgow, then expanding into Europe. It helped break the cartel that kept fares prohibitively high.
Sadly, for the past decade BMI has found it impossible to compete with no-frills airlines, and at present it’s losing £5 per second. Lufthansa, which is its very unwilling owner, has long been keen to offload BMI, and by Friday it should become part of IAG, the company that owns BA and Iberia of Spain.
Last week BA revealed plans for assimilating BMI that will see nearly half the 2,700 staff lose their jobs. How are the job cuts decided?
As is so often the case, it’s the back-office staff who will suffer most. BMI has the finest HQ in aviation, a stately home close to East Midlands airport called Castle Donington. But many of the functions carried out there, from marketing to finance, will simply be absorbed by existing BA departments with little room for staff to be tranferred. Survival prospects are highest for front-line staff at Heathrow – 1,100 ground staff, cabin crew, pilots and engineers will find that they are working on planes with a different livery.
If BMI is such a basket case – why is BA taking it over?
One word: slots. Because BA is already by far the biggest airline at Heathrow, it can extract the maximum value from the precious permission to take off and land at the world’s most congested airport. The takeover will win it an extra 56 pairs of slots a day, but BA is likely to surrender a quarter of those in return for the deal getting past competition regulators. That is not enough for Sir Richard Branson, president of Virgin Atlantic, who has vowed to fight the deal “in order to protect the millions of passengers who will see their options reduced by the takeover”.
What does it mean for passengers?….
Read this excellant study of Bmi’s takeover by Simon Calder at The Independant….
Simon Calder – The Independant
WEDNESDAY 18 APRIL 2012